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UNITED STATES SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-K/A

Amendment No. 1

o         ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2015

Commission file number 001-33961

HILL INTERNATIONAL, INC.

(Exact name of registrant as specified in its charter)

Registrant’s telephone number, including area code:  (215) 309-7700

Securities registered pursuant to Section 12(b) of the Act:

Securities registered pursuant to Section 12(g) of the Exchange Act: None

Indicate by a check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes o No x

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes o No x

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months, and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

Indicate by a check mark whether the registrant has submitted electronically and posted on its corporate website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§229.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No o

Indicate by a check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company.  See definitions of “accelerated filer,” “large accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act (Check one):

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x

The aggregate market value of shares of common stock held by non-affiliates on June 30, 2015 was approximately $203,536,000.  As of March 9, 2016, there were 51,701,442 shares of the Registrant’s Common Stock outstanding.

Documents Incorporated by Reference

None.

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HILL INTERNATIONAL, INC. AND SUBSIDIARIES

Index to Form 10-K/A

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EXPLANATORY NOTE

Hill International, Inc. (the “Company”) is filing this Amendment No. 1 to its Annual Report on Form 10-K for the fiscal year ended December 31, 2015, as originally filed with the Securities and Exchange Commission (“SEC”) on March 29, 2016 (the “Original Form 10-K”), to add information required in Part III of its Annual Report on Form 10-K because a definitive proxy statement containing such information will not be filed within 120 days after the end of the fiscal year covered by the Form 10-K.  The reference on the cover of the Original Form 10-K to the incorporation by reference to portions of its definitive proxy statement into Part III of the Original Form 10-K is hereby deleted. In addition, Item 15(b) of Part IV is being amended solely to add as exhibits 31.3 and 31.4 new certifications in accordance with Rule 13a-14(a) promulgated by the SEC under the Securities Exchange Act of 1934.

Except as described above, no other changes have been made to the Original Form 10-K.  This Amendment No. 1 continues to speak as of the date of the Original Form 10-K and the Company has not updated the disclosure herein to reflect any events that occurred at a later date other than as expressly stated herein. Accordingly, this Amendment No. 1 should be read in conjunction with the Original Form 10-K and with the Company’s filings made with the SEC subsequent to the filing of the Original Form 10-K.

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Part III

Item 10.  Directors, Executive Officers and Corporate Governance.

The information under the heading “Executive Officers” in Part I, Item 1 of the Original Form 10-K is incorporated by reference into this Item 10.

DIRECTORS

Our Directors are as follows:

IRVIN E. RICHTER has been Chairman of our Board of Directors since 1985 and he has been a member of our Board of Directors since he founded the company in 1976. He previously served as our Chief Executive Officer from 1976 to 2014. Mr. Richter is a Fellow of the Construction Management Association of America (CMAA) and a member of the World Presidents’ Organization. He is the author of several books including Handbook of Construction Law & Claims and International Construction Claims: Avoiding and Resolving Disputes. He has served on a number of Boards of Directors, including Rutgers University, Temple University Hospital and the CMAA. Mr. Richter holds a B.A. in government from Wesleyan University and a J.D. from Rutgers University School of Law at Camden, and he has been named a Distinguished Alumnus at both schools. Mr. Richter’s substantial expertise in the areas of project management and construction claims has made him highly regarded in our industry.  His strategic vision, leadership and construction industry knowledge have helped to guide the Company on its path of growth and success.  Age:  71.  Other Public Company Board Service:  None.

DAVID L. RICHTER has been our President and Chief Executive Officer since December 2014 and he has been a member of our Board of Directors since 1998. Prior to his current position, he was our President and Chief Operating Officer from March 2004 to December 2014. Before that, Mr. Richter was President of our Project Management Group from 2001 to 2004, Senior Vice President and General Counsel from 1999 to 2001 and Vice President and General Counsel from 1995 to 1999. Prior to joining us, he was an attorney with the New York City law firm of Weil, Gotshal & Manges LLP from 1992 to 1995.  Mr. Richter is a Fellow of both the Construction Management Association of America (CMAA) and the Chartered Institute of Building.  He is a member of the World Presidents’ Organization, the Construction Industry Round Table and the American Society of Civil Engineers. He is a member of the Board of Directors of the Greater Philadelphia Chamber of Commerce and the Board of Trustees of Princeton Day School.  He is a former member of the Board of Directors of the CMAA and the Board of Trustees of the Southern New Jersey Development Council.  Mr. Richter earned his B.S. in management, his B.S.E. in civil engineering and his J.D. from the University of Pennsylvania and his M.Sc. in major program management from the University of Oxford. Mr. Richter is a son of Irvin E. Richter. Mr. Richter has more than two decades of executive leadership with the Company and has developed great expertise in the construction management industry.  Age:  49.  Other Public Company Board Service:  None.

CAMILLE S. ANDREWS has been a director since June 2009.  Since 1998, Ms. Andrews has been an Associate Dean, and since 1996 a member of the faculty, of Rutgers University School of Law at Camden.  From 2007 to 2015, Ms. Andrews served as Counsel to Context Capital Partners, a private equity firm.  Between 1986 and 1996, Ms. Andrews was a Partner with the law firm of Dilworth Paxson LLP, and between 2006 and 2008, she was Of Counsel to that firm, with expertise in antitrust, securities, class actions, derivative and shareholder suits, and other complex litigation matters.  Ms. Andrews earned a B.A. magna cum laude in rhetoric and communication from the University of Pittsburgh and a J.D. with honors from Rutgers University School of Law at Camden, where she served on the Law Review.  She was a member of the Board of Trustees for the Leap Academy Charter School in Camden, NJ from 2000 — 2007 and has served on a number of charitable boards, including the Walnut Street Theater, ACYO Charitable Foundation (a subsidiary of The Goldman Sachs Group, Inc.), New Jersey Child Cares, and the Philadelphia Zoo Chairman’s Council.  She has also served on the New Jersey Supreme Court Committee on Judicial Education.  Ms. Andrews is admitted to practice law in New Jersey, Pennsylvania and before the U.S. Supreme Court.  Ms. Andrews offers a wealth of legal expertise in commercial matters and her service on the boards of other organizations provides cross-board experience.  Age:  56.  Other Public Company Board Service:  None.

BRIAN W. CLYMER has been a director since June 2006.  Mr. Clymer retired from Prudential Financial, Inc. where he was Senior Vice President of External Affairs from July 1997 to January 2013.  Prior to Prudential, he served as New

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Jersey State Treasurer under Governor Christine Todd Whitman from 1994 to 1997.  Prior to that, Mr. Clymer was President and Chief Executive Officer of Railway System Design, Inc. and Vice President of its parent company, Gannett Fleming, Inc., an engineering design firm, from 1993 to 1994.  From 1989 to 1993, he served under President George H.W. Bush as Administrator of the U.S. Federal Transit Administration.  Mr. Clymer has served on numerous Boards of Directors, including the New Jersey Sports and Exposition Authority, the New Jersey Casino Reinvestment Development Authority, the New Jersey Performing Arts Center, the Southeastern Pennsylvania Transportation Authority, the American Public Transit Association, Security First Bank, and Motor Coach Industries International, Inc., then a New York Stock Exchange-listed designer and manufacturer of buses and coaches.  He also served on the Board of Directors of the New Jersey Alliance for Action from 1997 to 2014 and currently serves on the Board of the Independent College Fund of New Jersey as past Chairman.  Mr. Clymer earned his B.S. in business and economics from Lehigh University and holds an honorary doctorate from Drexel University.  He is a Certified Public Accountant in the Commonwealth of Pennsylvania.  Mr. Clymer has spent almost 20 years in the field of public accounting and brings extensive experience as an executive and board member of various publicly and non-publicly held entities and offers deep knowledge of financial, economic and accounting matters.  Age:  69.  Other Public Company Board Service:  None.

STEVEN R. CURTS has been a director since October 2015.  Since May 2014, he has been the Chief Strategy Officer for American Express Global Business Travel.  Prior to that, he was a Vice President with Dell, Inc. from November 2009 to December 2013.  Before that, he worked for 20 years with Perot Systems Corp. in numerous roles, including President of its Commercial Solutions Group, Vice President of Corporate Planning and Financial Operations, and Vice President of Finance.  Mr. Curts received his B.B.A in accounting from Southern Methodist University.  Among other things, Mr. Curts brings experience as a senior finance leader with executive roles encompassing financial operations, business development, treasury and corporate planning.  Age: 55. Other Public Company Board Service:  None.

ALAN S. FELLHEIMER has been a director since June 2006.  He has been Chairman of the Philadelphia law firm of Fellheimer & Eichen LLP since January 2006.  He was Chairman of the Board of the Pennsylvania Business Bank, a state-chartered bank, from 1998, when he founded the bank, until 2008 when the bank was sold.  He also served as the bank’s President and Chief Executive Officer from 1998 until 2006.  From 1991 to 1998, Mr. Fellheimer was a Partner in the Philadelphia law firm of Fellheimer Eichen Braverman & Kaskey.  During 1990, he was a Partner with the Philadelphia law firm of Spector Gadon & Rosen, P.C.  From 1985 to 1990, Mr. Fellheimer was Chairman and Chief Executive Officer of Equimark Corp., then a New York Stock Exchange-listed bank holding company.  He currently serves as a member of the Board of Trustees and Executive Committee of Gratz College, an emeritus member of the Board of Trustees of the Pennsylvania Ballet, a member of the President’s Advisory Board of Temple University and a member of the Dean’s Advisory Board of the School of Social Policy & Practice of the University of Pennsylvania.  Mr. Fellheimer is a Trustee of the Law Foundation of Temple University and a Past Master; Past High Priest and Trustee of the Grand Lodge of Pennsylvania, AF&AM.  Mr. Fellheimer earned his A.B. in liberal arts and his J.D. summa cum laude from Temple University.  He is a member of the New Jersey, New York and Pennsylvania bars.  Mr. Fellheimer has significant banking expertise and brings to the Company experience in leadership positions with public and non-public entities.  Age:  72.  Other Public Company Board Service:  None.

STEVEN M. KRAMER has been a director since June 2010.  He is currently the Chief Executive Officer of Toms River Volkswagen which he acquired in February 2015. He also is the President of Synchema, a consulting company to the graphic arts industry which assists companies in various aspects of strategic planning.  Prior to Synchema, Mr. Kramer was President and Chief Operating Officer of Kelstar International, which he co-founded, in 1987 until it was sold to Altana, a publicly-owned German specialty chemical and pharmaceutical company, in October 2005.  Kelstar is a manufacturer of aqueous coatings, ultraviolet-curable coatings and specialty chemicals for the international printing industry.  A year after the acquisition and transition he resigned from Kelstar in 2006.  From the time of his resignation from Kelstar in 2006 until his founding of Synchema in 2009, Mr. Kramer pursued a variety of business interests independently.  Mr. Kramer earned his B.S. in Graphic Communications from the Rochester Institute of Technology.  Mr. Kramer was a member of the Board of Directors of Dragonfly Forest, Inc., a non-profit organization from 2010 until 2015 that was dedicated to providing overnight camp experiences to seriously ill children.  He was a member of the Young Presidents’ Organization from 2003 to 2012 and he has been a member of the World Presidents’ Organization since 2012.  Mr. Kramer’s experience as founder and executive of his own companies and his experience with respect to strategic planning provides valuable insight regarding the Company’s growth and direction.  Age:  54.  Other Public Company Board Service:  None.

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CRAIG L. MARTIN has been a director since February 2016.  In December 2014, Mr. Jacobs retired as the President and Chief Executive Officer of Jacobs Engineering Group, Inc.  He became President in July 2002 and Chief Executive in April 2006.  He also served as a member of Jacobs’ Board of Directors from 2002 until his retirement. Prior to July 2002, he served in several positions, most recently as Executive Vice President of Global Sales and Marketing.  Before joining Jacobs in 1994, he worked in various roles at CRSS International Inc. and Martin K. Eby Construction Co.  He received his B.S. in Civil Engineering from the University of Kansas and his M.B.A. from the University of Denver.  Mr. Martin has nearly 45 years of experience in the international engineering and construction industry.  Age:  69.  Other Public Company Board Service: None.

GARY F. MAZZUCCO has been a director since June 2013. Mr. Mazzucco founded Mazzucco & Company, CPAs in February 1977 and has served as its Managing Partner ever since.  He has been providing accounting, tax and consulting services for over forty years.  Prior to founding Mazzucco & Company, he was an accountant with Lybrand, Ross Brothers and Montgomery (a predecessor company of PricewaterhouseCoopers LLP) for two years and worked in private accounting for five years.  Mr. Mazzucco earned his B.S. in accounting from Mount Saint Mary’s University and has also served as a college professor, coach, mentor, board member, officer and trusted advisor to many individuals and organizations throughout his career. He is a certified public accountant in New Jersey. He is a member of the American Institute of Certified Public Accountants and a Fellow of the New Jersey Society of Certified Public Accountants. Age:  67.  Other Public Company Board Service:  None.

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Exchange Act requires our directors and executive officers and persons who beneficially own more than 10% of our common stock to file initial reports of ownership and changes in ownership with the SEC.  To the Company’s knowledge based on a review of copies of such reports furnished to Hill and on written representations made by such persons, all of the Company’s directors, executive officers and beneficial owners of more than 10% of our common stock have complied with all Section 16(a) filing requirements with respect to 2015 except that, due to administrative oversights, required Form 4 reports were not filed on a timely basis on behalf of the following persons:  Irvin E. Richter (2 transactions), David L. Richter (1 transaction), Brian W. Clymer (1 transaction), Steven L. Curts (1 transaction), Alan Fellheimer (2 transactions), Steven M. Kramer (2 transactions), Catherine H. Emma (1 transaction), Ronald F. Emma (1 transaction) and Frederic Z. Samelian (1 transaction).

CODE OF ETHICS

All directors, officers and employees of the Company are expected to act ethically at all times and in accordance with the policies comprising Hill’s Code of Ethics and Business Conduct (the “Code”) which is available on our website at www.hillintl.com, in the “Investor Relations” section, and is available in print to any stockholder upon request.  Any waiver or any implicit waiver from a provision of the Code applicable to Hill’s chief executive officer, chief financial officer, chief accounting officer or controller, or any amendment to the Code must be approved by the Board.  We will disclose on our website amendments to, and, if any are granted, any such waiver of, the Code. Hill’s Audit Committee is responsible for applying the Code to specific situations in which questions are presented to it and has the authority to interpret the Code in any particular situation.  If, after investigating any potential breach of the Code reported to it, the Audit Committee determines (by majority decision) that a breach has occurred, it will inform the Board of Directors.  Upon being notified that a breach has occurred, the Board (by majority decision) will take or authorize such disciplinary or preventive action as it deems appropriate, after consultation with the Audit Committee and/or the Company’s General Counsel, up to and including dismissal or, in the event of criminal or other serious violations of law, notification of the SEC or other appropriate law enforcement authorities.

CORPORATE GOVERNANCE

Pursuant to the Delaware General Corporation Law and the Company’s Amended and Restated By-laws, the Company’s business, property and affairs are managed by or under the direction of the Board of Directors.  Members of the Board are kept informed of the Company’s business through discussions with the Chief Executive Officer and other officers, by reviewing materials provided to them and by participating in meetings of the Board and its committees.  We currently have nine members on our Board.

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During 2015, the Board held nine meetings and the committees held a total of fifteen meetings.  Each director attended more than 75% of the total number of meetings of the Board of Directors and the Board committees of which he or she was a member during the period he or she served as a director in 2015.  Although, we do not have a policy requiring all directors to attend annual meetings of stockholders, we expect all directors to attend, absent extenuating circumstances. All of our directors attended the 2015 Annual Meeting of Stockholders.

As a result of our discussions with stockholders, the Company has taken several actions since our 2015 annual meeting to enhance the Company’s corporate governance including the following: (i) appointed two new independent directors to the Board, each of whom was also appointed to the Compensation Committee; (ii) appointed one of the new independent directors as Chairman of the Board’s Compensation Committee; (iii) initiated a comprehensive strategic review of our executive compensation programs, policies and practices; (iv) appointed a lead independent director; (v) revised our Bylaws to modernize and clarify certain provisions; (vi) engaged an independent executive compensation consultant, Pay Governance LLC, to support the Compensation Committee’s strategic review and provide pay governance and executive compensation program design recommendations; and (vii) revised our Insider Trading Policy to prohibit future speculative transactions, hedging transactions and, without prior Board approval, pledging or trading on margin of the Company Stock.  Further information on the actions we have taken in response or discussions with stockholders is included below and in “Compensation Discussion and Analysis” in Item 11 of this Annual Report on Form 10-K/A.

Board Leadership Structure

Our Amended and Restated By-laws provide that we will have a Chairman who will chair board meetings and perform such other duties as set forth in our Amended and Restated By-laws or as otherwise assigned to him by our Board.  The Chairman and Chief Executive Officer may be the same person; however, our Board may separate these two positions if it deems it to be in the best interests of our Company and our stockholders to do so.  Presently, the Chairman and Chief Executive Officer positions are held by two different individuals.

Prior to January 21, 2016, the Board had not appointed a lead independent director; however, Mr. Fellheimer, Chair of the Compensation Committee, presided over executive session meetings of independent directors.  At its January 21, 2016 meeting, the Board appointed Brian W. Clymer as its lead independent director.

Role of the Board in Risk Oversight

The Board as a whole has responsibility for risk oversight, with reviews of certain areas conducted by relevant Board committees that report on their findings to the Board.  The oversight responsibility of the Board and the Board committees is facilitated by management reporting processes designed to provide information to the Board concerning the identification, assessment and management of critical risks and management’s risk mitigation strategies and practices.  These areas of focus include operational, economic, competitive, financial (including accounting, reporting, credit, liquidity and tax), legal, regulatory, compliance, environmental, political and strategic risks.  The full Board (or the appropriate Board committee), in concert with the appropriate management within the Company, reviews management reports to formulate risk identification, risk management and risk mitigation strategies.  When a Board committee initially reviews management reports, the Chairman of the relevant Board committee briefs the full Board on the specifics of the matter at the next Board meeting.  This process enables the Board to coordinate the risk oversight role, particularly with respect to risks spanning more than one operational area.  The Compensation Committee reviews compensation policies to ensure that they do not, among other things, encourage unnecessary or excessive risk-taking.

Corporate Governance Guidelines

The Corporate Governance Guidelines adopted by the Board, which include guidelines for determining director independence, are published on the Company’s website at www.hillintl.com, in the “Investors” section, and are available in print to any stockholder upon request.  That section of the website makes available the Company’s corporate governance materials, including Board committee charters.  Those materials are also available in print to any stockholder upon request.

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COMMITTEES OF THE BOARD OF DIRECTORS

During 2015, the Board had standing Audit, Compensation, and Governance and Nominating Committees.  All members of each committee have been determined by the Board of Directors to be “independent” under applicable NYSE rules.  In addition, the Board has determined that each member of the Audit Committee meets SEC independence requirements which require that members of the Audit Committee may not accept directly or indirectly any consulting, advisory or other compensatory fee from Hill or any of its subsidiaries other than their directors’ compensation.  The charter of each committee is available on our website at www.hillintl.com, in the “Investors” section.

Audit Committee

Prior to November 10, 2015, the Audit Committee consisted of Brian W. Clymer (Chair), Alan S. Fellheimer, Steven M. Kramer and Gary F. Mazzucco.  On November 10, 2015, Steven R. Curts joined the Audit Committee and Steven M. Kramer was removed and, on February 1, 2016, Craig L. Martin joined the Audit Committee.  The Board has determined that each member of the Audit Committee is financially literate.  The Board has also determined that Brian W. Clymer possesses accounting or related financial management expertise within the meaning of the NYSE listing standards and qualifies as an “audit committee financial expert,” as defined by the rules of the SEC.

The Audit Committee assists the Board in fulfilling its oversight responsibilities by (a) reviewing the financial reports and other financial information provided by Hill to its stockholders, the SEC and others, (b) monitoring the Company’s financial reporting processes and internal control systems, (c) retaining Hill’s independent registered public accounting firm, (d) overseeing the Company’s independent registered public accounting firm and internal auditors and (e) monitoring the Company’s compliance with its ethics policies and with applicable legal and regulatory requirements.  The Audit Committee also reviews and approves any transactions between Hill and any related parties.  During 2015, the Audit Committee met nine times.

Compensation Committee

Prior to November 10, 2015, the Compensation Committee consisted of Alan S. Fellheimer (Chair), Camille S. Andrews and Steven M. Kramer.  On November 10, 2015, Steven R. Curts joined the Compensation Committee and was appointed chair.  On February 1, 2016, Craig L. Martin joined the Compensation Committee.  Each member of the Compensation Committee is a “non-employee director” as defined in Rule 16b-3 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and an “outside director” for purposes of Section 162(m) of the Internal Revenue Code of 1986, as amended (the “Code”).

The Compensation Committee oversees Hill’s executive compensation programs.  The Compensation Committee reviews and recommends to the Board for approval the compensation arrangements for all of the Company’s executive officers.  During 2015, the Compensation Committee met four times.  The processes of the Compensation Committee are described below in Item 11 of this Annual Report on Form 10-K.

Governance and Nominating Committee

During 2015, the Governance and Nominating Committee consisted of Camille S. Andrews (Chair), Brian W. Clymer, Steven M. Kramer and Gary F. Mazzucco.  The Governance and Nominating Committee oversees matters relating to the evaluation and recommendation to the Board of the persons to be nominated for election as directors at any meeting of stockholders, and the persons to be appointed by the Board to fill any vacancy on the Board.

The Governance and Nominating Committee is responsible for reviewing and assessing with the Board the appropriate skills, experience, and background sought of Board members in the context of our business and the then-current membership on the Board.  This assessment includes a consideration of independence, diversity, age, skills, experience, and industry backgrounds in the context of the needs of the Board and the Company, as well as the ability of current and prospective directors to devote sufficient time to performing their duties in an effective manner.  Although the Company does not have a formal policy with respect to diversity standards, as a matter of practice, the Governance and Nominating Committee considers matters commonly viewed as matters of diversity in the context of the Board as a whole and, in its

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effort to select a Board that it believes will best serve the interests of the Company and its stockholders, takes into account the personal characteristics and experience of current and prospective directors to facilitate Board deliberations that reflect a broad range of perspectives.

The Governance and Nominating Committee carefully considers all director candidates recommended by our stockholders, and the Governance and Nominating Committee does not and will not evaluate such candidate recommendations any differently from the way it evaluates other candidates.  On January 21, 2016, the Board amended its Bylaws which, among other things, set forth minimum qualifications for an individual to serve as a director on the Company.  These minimum qualifications provide that no person shall qualify for service or serve as a director of the Company: (a) unless such person is in compliance with all applicable laws and regulatory requirements to which the Company’s directors may be subject in connection with such person’s service as a director, (b) if such person has been convicted in, or entered a plea of nolo contendere with respect to, a criminal proceeding involving fraud, misappropriation or other similar charge during the ten years preceding the date of election, or if such person has been found responsible for or admitted responsibility for fraud, misappropriation or other similar charge in any governmental investigation or proceeding or other civil judicial proceeding during the ten years preceding the date of election, or if such person has been found responsible for or admitted responsibility for any material violation of any foreign, federal or state securities law or federal commodities law during the ten years preceding the date of election, (c) if such person has been convicted of, or entered a plea of nolo contendere with respect to, any felony, (d) if such person serves on the board of directors of more than three other public companies, (e) if such person is a director, officer or holder of more than a five percent (5%) equity interest, directly or indirectly, in a business that competes, directly or indirectly, with the Company, (f) if such person has made or makes any contribution or expenditure in connection with the election of any candidate for political office, including any contribution to any committee supporting such a candidate or to a political party, in any jurisdiction which results in the Company becoming ineligible to conduct its business or any portion thereof, or (g) if such person has ever been the subject of a filing of personal bankruptcy in any jurisdiction, either voluntarily or involuntarily (and in the case of an involuntary filing, if such filing was not dismissed within 60 days) during the ten years preceding the applicable date of election.

Any stockholder who wishes to recommend an individual as a potential nominee for election to the Board should submit such recommendation in writing by mail to Hill International, Inc., One Commerce Square, 2005 Market Street, 17th Floor, Philadelphia, Pennsylvania 19103, Attn:  Chair of Governance and Nominating Committee, together with information regarding the experience, education and general background of the individual and a statement as to why the stockholder believes such individual to be an appropriate candidate for the Board of Directors of Hill.  Such recommendation should be provided to Hill no later than the close of business on the 120th day prior to the one-year anniversary of the date the Company’s proxy statement was released to stockholders in connection with the previous year’s annual meeting.  During 2015, the Governance and Nominating Committee held two meetings.

Communicating Concerns to Directors

The Company encourages all interested persons to communicate any concern that an officer, employee, director or representative of Hill may have engaged in illegal, dishonest or fraudulent activity, or may have violated Hill’s Code of Ethics and Business Conduct.  Such persons may report their concerns or other communications including suggestions or comments to the Board in one of the following ways:  by mail sent to William H. Dengler, Jr., Corporate Secretary, at the Company’s principal executive office:  One Commerce Square, 2005 Market Street, 17th Floor, Philadelphia, Pennsylvania 19103; by telephone at (866) 352-2792; or by email addressed to hil@openboard.info.  All such communications will be referred to Mr. Dengler who will circulate them to the members of the Board, or in the case of potential violations of the Code of Ethics and Business Conduct, to the Chairman of the Audit Committee.  If the communication is directed to a particular director, Mr. Dengler will forward the communication to that director.  The Board does not screen stockholder communications.

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Item 11.  Executive Compensation.

Executive Summary

Our Compensation Philosophy and Guiding Principles

In support of our business and our long-term success, the Company’s compensation program is designed to attract, motivate, reward and retain high-quality executives necessary to continually improve financial performance, achieve profitable growth and enhance stockholder value.

To that end, our Compensation Committee (the “Committee”) has developed a compensation philosophy designed to reflect the following principles:

·                  There should be a strong link between pay and performance

·                  The interests of executives should be aligned with the interests of our stockholders

·                  Compensation programs should reinforce our business strategy, focus the executive team on priorities and ultimately drive growth in stockholder value.

Investor Outreach and Response

·                  At our 2014 annual meeting of stockholders, 54.2% of stockholders supported our Named Executive Officers (“NEO”) compensation program.  This result, however, fell short of our expectations.

·                  To better understand any potential concerns of stockholders, members of management met with many of our stockholders during 2015 and discussed the compensation paid to our executive officers, including our NEOs, and explained the rationale behind the Committee’s approaches, which included:

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Further, as a result of our discussions with investors, the Company has taken the following actions since August 2015:

1.              Appointed two new independent directors to the Board, each of whom was also appointed to the Compensation Committee;

2.              Appointed one of the new independent directors as Chairman of the Compensation Committee;

3.              Initiated a comprehensive strategic review of our executive compensation programs, policies and practices;

4.              Engaged an independent executive compensation consultant, Pay Governance LLC, to support the Compensation Committee’s strategic review and provide pay governance and executive compensation design recommendations;

5.              Revised our Insider Trading Policy to prohibit future speculative transactions, hedging transactions and, without prior Board approval, pledging or trading on margin of Company Stock; and

6.              Committed to expanding our executive compensation-related stockholder outreach efforts during 2016 as part of the strategic review.

We value the feedback provided by our stockholders and look forward to continuing this dialogue.

2015 Financial Highlights

Overall, 2015 was a turnaround year in terms of profitability despite some significant events and items negatively impacting our performance.

·                  Our Project Management and Construction Claims segments had strong years with consulting fee revenue increasing 9.1% and 10.0%, respectively, and operating profit increasing 5.2% and 6.8%, respectively.

·                  We initiated and completed a review of our global overhead cost structure; these efforts have successfully reduced our overhead costs by approximately $21 million annually.

·                  2015 interest expense was lower by over $15.8 million compared to the prior year as a result of our successful 2014 equity raise and debt refinancing.

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·                  Despite these successes, we experienced significant expenses associated with bad debt expense related to certain accounts receivable primarily in the Middle East, severance costs associated with our cost optimization plan, legal and professional fees related to a stockholder proxy contest and legal fees and settlement costs in connection with a labor dispute with a former executive. As a result, we fell short of our internal operating profit and earnings per share (“EPS”) goals.

2015 Performance-Based Bonuses (Cash)

2015 Annual Incentive Plan (“AIP”) payouts for our CEO and COO were based on our performance against two weighted financial metrics: 60% based on EPS and 40% based on earnings before interest expense, income taxes, depreciation and amortization (“EBITDA”).  If actual performance on either measure was below 50% of target, no bonus was paid.

The target bonus opportunity for the CEO and COO was set as a fixed dollar amount ($1,000,000 and $200,000 respectively).

The 2015 AIP threshold and target performance goals were set by the Board upon the Committee’s recommendation that the Board-approved budget-based targets were appropriate.

During 2015, we achieved 56.7% of established EPS target performance and 85.1% of established EBITDA target performance. These levels of performance were above our required thresholds but below our targets and resulted in AIP payouts of $680,583 for our CEO and $136,117 for our COO.  These bonus determinations are detailed on page 19.

Though below our expectations, the 2015 AIP payouts were more favorable compared to 2014 due principally to the stronger financial performance in 2015 and demonstrate our pay-for-performance philosophy.

AIP payouts for our other executive officers, including the other NEOs, are awarded by the Board upon the Committee’s recommendation after considering the input of our CEO.  In preparing recommended award levels, the CEO and Committee considered Company performance as well as individual performance against personal and operating/functional unit goals.  AIP payouts for the other NEO’s ranged from $50,000 to $140,000.

Our Chairman, Irvin Richter, did not receive any bonus payment in 2015.

2015 Long-Term Incentive Awards (Equity)

Long-term incentive compensation opportunities for our executive officers, including the NEOs, are entirely equity-based.  In 2015, NEOs received an award of stock options that vests in equal installments over five years and expires in seven years.  Stock options have been used to focus our executive officers on actions that will lead to growth in the Company share price and increased value for our stockholders.

In determining the value of each NEO’s 2015 long-term grant the Committee considered the performance of each individual as well as the executive’s roles and responsibilities, his or her impact on our results, and advancement potential.  2015 stock option awards for our NEOs were as follows:

·                  CEO:  $1,010,000

·                  COO:   $414,000

·                  Other NEOs:  ranged from $51,750 to $103,500

Our Chairman, Irvin Richter, did not receive any equity award in 2015.

2015 Compensation Governance Practices

We are committed to executive compensation practices that drive performance and that align the interests of our leadership team with the interests of our stockholders. We are considering the appropriateness of these and other policies and practices as part of our comprehensive executive compensation strategic review. Best practices that we have implemented with respect to the compensation of our NEOs include:

1.              A significant portion of our executives’ target compensation is related to performance based upon and tied to pre-established performance goals and the performance of our share price;

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2.              Total direct compensation for our NEOs is targeted at the market median;

3.              Engaged an independent outside compensation consultant;

4.              Maintain a clawback policy; and

5.              “Double-trigger” severance payments for executive officers requiring both a change of control and termination of employment.

Practices we avoid with respect to the compensation of our NEOs include:

1.              No tax gross ups for perquisites or change in control severance benefits provided to our executive officers;

2.              No speculative trading of Company stock;

3.              No hedging transactions;

4.              No repricing of stock options; and

5.              No unapproved pledging of Company stock.

Actions Related to 2016 Executive Compensation

In addition to the actions taken in 2015, the Committee has already implemented a number of changes for 2016 executive compensation based on the results of a preliminary market compensation review prepared by Pay Governance, the Company’s performance in 2015 and stockholder and proxy voting advisor feedback. These changes are as follows:

1.              Revised our compensation philosophy to target the 50th percentile of the market;

2.              Approved modest, average 3 percent, salary increases for our executive officers;

3.              Established a bonus program for the CEO and COO that is tightly tied to achieving superior EPS performance during 2016 (details are provided in Part 3 of the Compensation Discussion and Analysis at page 23).

·                  2016 EPS goal has been set at a premium to our Board-approved budget;

·                  No award for actual EPS less than 80% of target; and

·                  A bonus up to 200% of target can be earned for performance up to 140% of the EPS goal.

4.              2016 equity awards for the CEO and COO are 100% in the form of premium priced stock options.  Premium exercise prices were set by the Board at $4.00 and $5.00, representing 22.3% and 52.9% premiums over the closing price of our stock on the date of grant (details are provided in Part 3 of the Compensation Discussion and Analysis on page 24); and

5.              Lowered the per-director compensation provided to our non-employee directors from approximately $180,000 per year to $120,000 per year as we added two new non-employee directors.

We expect to continue meeting with many of our shareholders regarding executive compensation throughout 2016 to gather feedback and discuss possible changes as we work through the strategic review of our compensation programs and prepare for our triennial “say-on-pay” stockholder vote in 2017.

Compensation Discussion and Analysis

This section discusses our executive compensation programs for 2015, the compensation decisions made under those programs and the factors that were considered by the Committee in making those decisions.  It focuses on the compensation for each of our NEOs for 2015:

·                  David L. Richter, President and Chief Executive Officer;

·                  John Fanelli III, Senior Vice President and Chief Financial Officer;

·                  Raouf S. Ghali, Chief Operating Officer;

·                  Mohammed Al Rais, President (Middle East), Project Management Group; and

·                  Frederic Z. Samelian, President, Construction Claims Group.

This Compensation Discussion and Analysis is divided into three parts:

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Part 1 discusses our 2015 performance, the Committee’s actions in 2015, our compensation practices and the compensation decisions for our NEOs.

Part 2 discusses our compensation framework in more detail, including how we apply our compensation philosophy and determine competitive positioning of our executive compensation and other policies.

Part 3 discusses certain actions taken by the Committee in 2016 regarding compensation decisions for our NEOs.

Part 1 — 2015 Performance, Compensation Governance Practices and Decisions

2015 Performance Overview

Despite some challenges, 2015 was a turnaround year for the Company in terms of profitability.  The accomplishments of our executive team, led by our CEO David Richter, include the following:

·                  Consolidated consulting fee revenue increased by $53,834,000 or 9.3%;

·                  Increased consulting fee revenue and operating profit of our Project Management segment by 9.1% and 5.2%, respectively;

·                  Increased consulting fee revenue and operating profit of our Construction Claims segment by 10.0% and 6.8%, respectively;

·                  Completed a review of our global overhead cost structure which eliminated annualized overhead costs of approximately $21,000,000; and

·                  Decreased interest expense by $15,822,000 compared to the prior year as a result of our successful equity raise and debt refinancing in 2014.

Compensation Governance Practices

We are committed to executive compensation practices that drive performance and that align the interests of our leadership team with the interests of our stockholders. We are considering the appropriateness of these and other policies and practices as part of our comprehensive executive compensation strategic review. Below is a summary of best practices that we have implemented and practices we avoid with respect to the compensation of our NEOs.

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Executive Compensation Elements

The following chart summarizes the key features of each element of our executive compensation program: cash (salary and annual bonus); equity (long-term incentive); retirement (401(k) Plan); and other compensation (perquisites).  Each type is discussed in detail in the remainder of this Compensation Discussion and Analysis and the accompanying tables.

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Summary of Key 2015 Compensation Decisions

The following highlights the Committee’s key compensation decisions for 2015, as reported in the Summary Compensation Table on page 25.

Chairman Compensation

In 2014, Irvin Richter received total compensation of $3,717,512 plus benefits.

During 2015, Irvin Richter received no compensation for serving on the Board of Directors.  For services to the Company as an employee during 2015, Mr. Richter received the following compensation:

·                  Salary of $1,400,000;

·                  Other benefits (insurance, medical and disability and use of two vehicles);

·                  No 2015 AIP award; and

·                  No 2015 equity award.

CEO Compensation

On December 31, 2014, David Richter became our President and CEO.  His employment agreement establishes his total direct compensation (“TDC”) opportunity, consisting of base salary and annual and long-term incentive opportunities which must be at least at the 75th percentile of CEOs in our Selected Peer Group (as defined in Part 2 of the Compensation Discussion and Analysis on page 22).  In recognition of his promotion to President and CEO, for 2015 the Committee took the following actions on Mr. Richter’s compensation:

·                  Annual base salary was increased from $1,000,000 to $1,500,000;

·                  Annual incentive target award opportunity was set at $1,000,000; and

·                  Long-term (equity) incentive established as 500,000 stock options with a fair value at the grant date of $1,010,000.

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Compensation of Other NEOs

The Committee approved salaries of all NEOs and set incentive-compensation targets for Mr. Ghali taking into account the CEO’s recommendations, relative duties and responsibilities, advancement potential and impact on our financial and strategic performance.  In recognition of his promotion to COO in January 2015, Mr. Ghali received a 16% salary increase.  The Committee approved salary increases ranging from 4% to 10% for all other NEOs.

Details of 2015 NEO compensation are provided in the table below.

Pay Mix

One of our compensation objectives is to emphasize the creation of long-term stockholder value.  To support this goal, a portion of each NEO’s pay is awarded under our long-term incentive plan in the form of stock options.  Nearly 29% of Mr. Richter’s targeted TDC and approximately 12% of the targeted TDC for the COO is based upon long-term value creation as measured by growth in our share price.

2015 NEO Base Salaries, Annual Incentive Target and Long-Term Incentive Expected Value

(1)         All base salaries effective as of January 1, 2015.

(2)         The Committee established targets for Mr. Richter and Mr. Ghali for 2015 performance. 2015 bonuses for other NEOs were at Committee discretion and bonuses of $50,000, $140,000 and $50,000 were awarded on April 2, 2016 to Mr. Fanelli, Mr. Al Rais and Mr. Samelian, respectively.

(3)         The expected value of the stock options was based on a pricing model using the grant date closing price of $3.72 per share on January 2, 2015 for Mr. Richter and $4.03 per share on January 27, 2015 for Mr. Ghali.  For the assumptions made in determining grant date fair values, refer to Note 11 to the consolidated financial statements included in our Annual Report on Form 10-K which was filed with the SEC on March 29, 2016.

(4)         Total direct compensation consists of base salary, annual bonus target and long-term equity award expected value.

(5)  The Committee established Mr. Ghali’s annual bonus target on January 27, 2015, when he was promoted to COO.

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Our 2015 Annual Incentive Compensation Program

Plan Criteria and Rationale

The 2015 annual incentive opportunities for our CEO and COO are based on our financial performance as measured by EPS and EBITDA.

In 2015, as in past years, the Committee evaluated the continued use of the AIP financial measures using the following principles:

·                  Metrics that support achievement of an annual Board-approved budget;

·                  Metrics that support profitable growth while preserving cash for longer-term investment;

·                  Metrics that are clearly understood and can be affected by the performance of our executives and employees; and

·                  Metrics that are consistent with market practice and commonly used by analysts in assessing our performance.

Following this review, the Committee concluded that the continued use of the AIP financial measures support the foregoing principles for the following reasons:

·                  EPS is a comprehensive measure of income and provides an emphasis on profitable growth while focusing managers on expense control.

·                  EBITDA provides a focus on our core operating results by removing the impact of our capital structure (interest expense from outstanding debt), asset base (depreciation and amortization) and tax consequences, as well as specified non-core operating items, specified non-operating items, specified non-cash items and specified extraordinary items.

Target Setting

The 2015 target annual incentive awards for our CEO and COO were set as a fixed dollar amount ($1,000,000 and $200,000, respectively).  Target awards are reviewed annually to ensure alignment with our compensation philosophy.

Variances from these target payout values are based upon Company performance against the pre-established EPS and EBITDA goals.  The performance/payout relationship around targeted performance levels was set at the beginning of the performance year and reflected our expectation for the year that management should strive to achieve our plan and be held accountable with lower than target payouts if performance fell below plan.  Our 2015 plan used the following performance and payout relationship:

Financial Results for AIP Purposes

The Committee set the AIP EPS and EBITDA targets based on its evaluation of the budget-based amounts and its assessment that the targets contained a sufficient degree of “stretch.”  These targets, actual 2015 performance on each

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metric, the resulting Bonus Payout Factor and 2015 AIP bonus payouts for the CEO and COO are shown in the tables below.

2015 AIP
Performance Metrics, Weight and Achievement

(1)         EPS for annual incentive purposes is based on diluted earnings per common share.

(2)         EBITDA for annual incentive purposes is based on net earnings before interest, taxes, depreciation and amortization. There were no specified non-core operating, non-operating, non-cash or extraordinary items considered by the Committee in determining EBITDA.

(3)  Reflects Metric Weights applied to % of Target for each Metric.

2015 AIP Threshold, Target, Maximum and Actual Payouts and Achievement

For the 2015 AIP bonus awarded to the NEOs other than the CEO and COO, the Committee considered the recommendations of the CEO for each such individual which were based on the Company’s performance, respective experience, contribution and responsibilities of each individual.

Our Long-Term Equity Incentive Program

Plan Criteria and Rationale

Long-term incentive compensation for all our executive officers, including our NEOs, is entirely equity-based.  Historically, we have delivered this compensation opportunity through the use of stock options.

Stock option awards are used to complement the AIP financial metric focus by aligning the team around actions that will promote the long-term growth of our share price.  Our options also have a, five-year vesting schedule in order to promote retention of our leaders.

In this way, the combination of our AIP and options balance the focus of our team in a coordinated way around short-term financial and longer-term share price performance, both of which are directly linked to value creation for stockholders.

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Equity Award Grant Practices

Historically, equity awards are made to the CEO and COO once per year and to other NEOs every other year.  The awards are historically made at the annual grant meeting in January.  The Committee’s equity-based awards policy contains rules on determining the grant date of equity awards and the exercise price of any stock options, which must be at least equal to the fair market value of our stock on the grant date.

After benchmarking with our Selected Peer Group, the Committee did not make significant changes to the size of the awards for 2015 other than for Mr. Ghali in recognition of his promotion to COO in January 2015.

2015 Long-Term Equity Awards

In 2015, long-term equity plan participants, including our NEOs, received a grant of stock options.

The value of each NEO award was determined by the Committee after considering company performance, individual impact on our financial results, market norms and relative duties, responsibilities and advancement potential.  The value of the grants made in January 2015 are shown in the following table.

2015 Long-Term Equity Award Value

(1)         The expected fair value of the stock options was based on the closing price of the Company’s common stock of $3.72 per share on January 2, 2015 for Mr. Richter and $4.03 per share on January 27, 2015 for the other NEOs.  For the assumptions made in determining grant date fair values, refer to Note 11 to the consolidated financial statements included in our Annual Report on Form 10-K filed with the SEC on March 29, 2016.

(2)         TDC consists of base salary and annual and long-term incentive opportunities.

Part 2 — Compensation Framework

Compensation Philosophy and Objectives

Our compensation philosophy is to provide competitive executive officer pay opportunities tied to our short-term and long-term success.  This overriding pay-for-performance approach enables us to attract, motivate and retain the type of executive leadership that will help us achieve our strategic objectives and realize increased stockholder value.  To reach these goals, we have adopted the following program objectives:

·                  Link management compensation with the interests of stockholders.

·                  Support achievement of both operating performance, strategic objectives and share price growth through variable compensation programs.

·                  Be fair and market-competitive to assure access to needed talent and encourage retention.

·                  Provide compensation opportunities that are consistent with each executive’s responsibilities, experience and performance.

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·                  Design compensation incentive programs that promote a sensible risk/reward balance, and that do not encourage unnecessary or unreasonable risk-taking.

·                  Use perquisites sparingly.

Applying our Compensation Philosophy

We apply our compensation philosophy and objectives as follows:

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Competitive Positioning

In support of our compensation philosophy, we target the compensation values consistent with the markets with which we compete for executive talent, capital and business; for the CEO, this market is defined as our Selected Peer Group.

The Selected Peer Group is composed of companies with size, industry, operational and client characteristics that are similar to Hill.

Generally, we use data drawn from this group as a reference which the Committee reviews competitive pay practices, design approaches and for pay-for-performance comparisons.

Where compensation data and practices are not available from companies within the Selected Peer Group, the Committee may, from time to time, also reference broader survey sources which include other companies of comparable size, scope and complexity, with which we compete for talent.  This approach provides the Committee with decision-quality data and context.  The Committee annually evaluates and, if appropriate, updates the composition of the Selected Peer Group.  In 2015, the Committee evaluated a few potential additions, but no changes were made to the Selected Peer Group.  The 2015 Selected Peer Group consisted of the following companies:

2015 Selected Peer Group

CRA International, Inc.   Exponent, Inc.   Huron Consulting Group, Inc.   Navigant Consulting, Inc.

Setting Compensation Targets and Performance Goals

The Committee annually reviews the total compensation opportunity of each executive officer—i.e., cash compensation (salary and target annual incentive opportunity) and long-term equity compensation (target long-term equity value).

The Committee, with periodic input from an independent consultant, then sets the executive’s compensation target for the current year. Salary adjustments, if any, typically become effective as of January 1 of each year or upon a promotion.  The compensation proposal for the CEO and COO is reviewed with and ratified by the independent directors of the Board in executive session.

In making its decisions, the Committee uses several resources and tools, including competitive market information and peer group compensation trends, broader survey sources and the larger executive compensation environment.

For 2015, the Committee set target performance levels for the financial objectives used in the AIP and concluded that there was an appropriate correlation between payout  and performance levels (at target, threshold and maximum) in light of the business environment, risks associated with achieving our five-year strategic plan and other factors.

Evaluating Performance

For the CEO and COO, performance determination under the AIP was 100% based on financial metrics.  For other NEOs, the Committee uses its judgment in making decisions about individual compensation elements and total compensation, with a focus on individual, business/unit and overall company performance.  The Committee also considers competitive market norms in making final compensation decisions.

Post-Employment Compensation Arrangements

Termination Payments

In the event of a change in control, we provide certain senior executive officers with benefits upon termination in various circumstances under our 2015 Senior Executive Retention Plan (the “Retention Plan”). The Retention Plan provides change in control severance benefits only upon a double-trigger (change in control and termination of employment).  Generally, these benefits provide for two years of salary and benefits continuation.  For 2015, each of our NEOs, except our CEO, was eligible to receive benefits under the Retention Plan.

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Under his employment agreement, Mr. Richter is eligible to receive certain benefits if (i) his employment is terminated by the Company without cause, (ii) he terminates his employment for good reason or (iii) he terminates his employment within two years of a change in control of the Company.  Generally, these benefits provide for three years of salary and benefits continuation.

We detail the compensation estimated to be paid to our NEOs under various termination circumstances beginning on page 29.

Other Compensation Policies

Personal Benefits

We provide our NEOs with other benefits that we believe are reasonable and competitive so that we may attract and retain talented senior executives.  In total, they represent a small percentage of each NEO’s overall compensation and generally are identical to the benefits provided to all other Hill employees.

Policy on Hedging and Pledging

Our insider trading policy contains restrictions on certain transactions in Company stock by executive officers and directors.  All trades by executive officers and directors must be pre-cleared.  The executive officers and directors are prohibited from any trading in puts or calls, from engaging in short sales of Company stock or from hedging Company stock.  Making pledges of Company stock or using it as loan collateral or as part of a margin account in the future is prohibited unless expressly approved by the Board.

Risk Considerations in Our Compensation Programs

The Committee has reviewed our compensation policies and practices for the Company’s executive officers and concluded that any risks arising from these policies and programs are not reasonably likely to have a material adverse effect.  The Committee believes that the mix and design of the elements of our compensation program are appropriate and encourage executive officers and key employees to strive to achieve goals that benefit the Company and our stockholders over the long term.  Our compensation policies and procedures are applied uniformly to all eligible participants and when viewed in aggregate, our programs provide sufficient safeguards, balance and governance that does not encourage excessive risk-taking by our employees.

Part 3 — 2016 Compensation Committee Actions

2016 Committee Actions

The Committee is in the process of reviewing the Company’s compensation philosophy and is evaluating the design and performance of our executive compensation programs to ensure we have a program that aligns with governance and market best practices to the fullest extent possible while ensuring it is structured to best support achievement of our business strategy and human capital needs.  As a result of this ongoing review and evaluation, the Committee has already taken the following actions at this point in 2016:

Compensation Philosophy for Executive Officers — Revised the compensation philosophy to target total compensation of Executive Officers to the 50th percentile of the market.

Modest Salary Increases — Approved modest salary increases for executive officers with an average 3% increase year-over-year.

2016 AIP Bonus Plan for CEO and COO — Adopted 2016 Annual Incentive Award for CEO and COO entirely based on achieving superior EPS results for the year.  Target EPS performance has been set at a premium over thee 2016 operating budget and in excess of last year’s actual EPS results.  The overall performance/payout range for 2016

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has been set as follows:

“Premium Priced” Stock Option Grants — The 2016 Long-Term Incentive Awards to the CEO and COO were in the form of “Premium Priced” stock options.

·                  CEO:  granted 250,000 stock options with a premium exercise price of $4.00 and 250,000 options with a premium exercise price of $5.00, representing 22.3% and 52.9% premiums over the $3.27 closing price of our common stock on the date of grant.

·                  COO:  granted 250,000 stock options with a premium exercise price of $4.00, representing a 22.3% premium over the $3.27 closing price of our common stock on the date of grant.

Insider Trading Policy — Revised the Company Insider Trading Policy to generally prohibit speculative transactions, hedging transactions and pledging or trading on margin of the Company’s common stock

Compensation Committee Report

The Compensation Committee has reviewed and discussed with management the Compensation Discussion and Analysis.  Based on our review and discussions with management, the Compensation Committee recommended to the Board, and the Board approved, the inclusion of the Compensation Discussion and Analysis in this Annual Report on Form 10-K/A for the fiscal year ended December 31, 2015.

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EXECUTIVE OFFICER COMPENSATION

Summary Compensation Table

The following table contains information concerning the annual compensation for our NEOs during 2015, 2014 and 2013.

Summary Compensation Table

(1)         The amounts reported in this column reflect the aggregate grant date fair value of grants of stock options calculated in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718 (“ASC 718”).  The calculation of these amounts disregards the estimate of forfeitures related to time-based vesting conditions.  The amounts in this column do not reflect compensation actually received by the named executive officer.  The actual value, if any, that an executive may realize from an award is contingent upon the satisfaction of the conditions to vesting in that award, and upon the excess of the stock priced over the exercise price, if any, on the date the award is exercised.  Thus, there is no assurance that the value, if any, eventually realized by the named executive officer will correspond to the amount shown.

(2)         The Black-Scholes option valuation model is used to estimate the fair value of the options in accordance with ASC 718.  For a discussion of the assumptions used, see Note 11 to the Company’s 2015 consolidated financial statements included in our Annual Report on Form 10-K filed with the SEC on March 29, 2016.

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(3)         Hill provides its NEOs with additional benefits, reflected in the table below for 2015, that Hill believes are reasonable, competitive and consistent with the Company’s overall executive compensation program.

Grants of Plan-Based Awards

The following table presents information about equity-based awards made to our named executive officers in 2015:

(1)         Represents options issued under the 2006 Employee Stock Option Plan.  Information regarding the vesting schedules and expiration of these options is included in the “Outstanding Equity Awards at Fiscal Year-End” table and the footnotes thereto.  Options will vest on an accelerated basis upon the executive’s termination of employment under certain circumstances.  Additional information regarding the vesting acceleration provisions applicable to equity awards is included under the heading “Potential Payments upon Termination or Change in Control.”

(2)         See footnotes 1 and 2 to the Summary Compensation Table regarding calculation of these amounts.

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Outstanding Equity Awards at Fiscal Year-End

The following table presents information with respect to outstanding equity awards held by our named executive officers as of December 31, 2015.

(1)                   These options were granted on March 9, 2009 and vest at the rated of 20% per year with vesting dates of March 9, 2010, 2011, 2012, 2013 and 2014.

(2)                   These options were granted on March 31, 2010 and vest at the rate of 20% per year with vesting dates of March 31, 2011, 2012, 2013, 2014 and 2015.

(3)                   These options were granted on January 26, 2011 and vest at the rate of 25% per year with vesting dates of January 26, 2012, 2013, 2014 and 2015.

(4)                   The named executive officer’s beneficial ownership of the Company’s common stock exceeded 10% on the grant date.  The 2006 Employee Stock Option Plan requires that he grant of incentive stock options to a stockholder whose ownership of the Company exceeds 10% at the time of grant be made at an exercise price equal to 110% of the fair market value of the Company’s common stock at the date of grant.

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(5)                   These options were granted on March 6, 2012 and vest at the rate of 25% per year with vesting dates of March 6, 2013, 2014, 2015 and 2016.

(6)                   These options were granted on January 21, 2013 and vest at the rate of 25% per year with vesting dates of January 21, 2014, 2015, 2016 and 2017.

(7)                   These options were granted on January 2, 2014 and vest at the rate of 20% per year with vesting dates of January 2, 2015, 2016, 2017, 2018 and 2019.

(8)                   These options were granted on January 2, 2015 and vest at the rate of 20% per year with vesting dates of January 2, 2016, 2017, 2018, 2019 and 2020.

(9)                   These options were granted on June 3, 2011 and vest at the rate of 20% per year with vesting dates of June 3, 2012, 2013, 2014, 2015 and 2016.

(10)            These options were granted on January 21, 2013 and vest at the rate of 20% per year with vesting dates of January 21, 2014, 2015, 2016, 2017 and 2018.

(11)            These options were granted on March 10, 2014 and vest at the rate of 20% per year with vesting dates of March 10, 2015, 2016, 2017, 2018 and 2019.

(12)            These options were granted on January 27, 2015 and vest at the rate of 20% per year with vesting dates of January 27, 2016, 2017, 2018, 2019 and 2020.

Option Exercises

The following table provides information on the exercise of stock options by our named executive officers during 2015.

Employment Agreement with Our President and CEO

Under an agreement effective December 31, 2014 with a five-year term, our President and CEO, David L. Richter, receives a base salary of no less than $1,000,000, to be adjusted annually, and is eligible to receive an annual bonus based upon the achievement of performance criteria to be established by the Board or its Compensation Committee for the applicable year.  He also is eligible to receive an annual long-term incentive award, which may consist of stock options issued by the Company, shares of restricted stock of the Company, and other forms of equity-based, equity-linked or other long-term incentive compensation. The amount and other terms of long-term incentive awards made to him, if any, are determined by the Board or its Compensation Committee.  The agreement establishes his total direct compensation opportunity, consisting of base salary and annual and long-term incentive opportunities at least at the 75th percentile of CEOs in our Selected Peer Group.  The agreement further provides that he is entitled to all benefits of employment provided to other employees of the Company and provides Mr. Richter with two vehicles for his use during the employment term.

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Potential Payments Upon Termination or Change in Control

The Company has entered into agreements and maintains plans that will require the Company to provide compensation to certain individuals in the event of a termination of employment and/or a change in control of the Company.  The potential amount of compensation payable to each individual in each situation is set forth in the tables below.  The amounts shown in the tables assume that termination of the individual and/or a change in control occurred on December 31, 2015 and are based on the closing price per share of Hill common stock on that date of $3.88.  The actual amounts to be paid will depend on the circumstances and time of the termination or change in control.  Please see “Employment Agreement with Our President and CEO” for a description of the material terms of the employment agreement we have entered into with our President and Chief Executive Officer.  In addition, the Company has change in control arrangements with our other NEOs.

David L. Richter

(1)         Upon David L. Richter’s death, the Company shall continue to pay to his surviving spouse his then base salary, for a period of 90 days.  On December 31, 2015, Mr. Richter’s base salary was $1,500,000.

(2)         The Company is required to make this cash payment to Mr. Richter within thirty days after the effective date of such termination in an amount equal to three years of his then base salary if (i) his employment is terminated by the Company without cause, (ii) he terminates his employment for good reason or (iii) he terminates his employment within two years of a change in control of the Company.

(3)         Mr. Richter is entitled to all benefits of employment provided to other employees of the Company in comparable positions for a period of three years.

(4)         The Company is required to continue to provide Mr. Richter with two Company vehicles appropriate to his position and pay all insurance, fuel, maintenance and operating expenses of such vehicles for a period of three years if (i) his employment is terminated by the Company without cause, (ii) he terminates his employment for good reason or (iii) he terminates his employment within two years of a change in control in the Company.

(5)         Mr. Richter’s stock options immediately vest if the Company terminates him without cause.  As of December 31, 2015, Mr. Richter had unvested stock options to purchase 110,025 shares at $5.47 per share, 250,000 shares at $4.04 per share, 400,000 shares at $3.95 per share and 500,000 shares at $3.91 per share. This amount represents the intrinsic value of the award based on the difference between the exercise price and $3.88, the closing price of the Company’s common stock on December 31, 2015.  The amount reported does not include the value of accelerated options where the exercise price of such options exceeded the closing price of the Company’s common stock on December 31, 2015.

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John Fanelli III